Thai central bank governor: 2014 growth "not very high"

BANGKOK -- Gov. Prasarn Trairatvorakul of the Bank of Thailand said that the country's growth rate for this year "will not be very high," but that the economy "will not retreat."

For 2015, he foresees the economy picking up and a better growth rate "if there is no accidental situation." Thailand contracted in the first quarter of this year, hit by prolonged political turmoil.

Prasarn told reporters Thursday that the latest economic statistics for April and May indicated some "good signs," but he remained cautious on some of the factors that may hold back growth for the full year. Consumer spending, for example, shows little strength, as household debt levels are "quite high."

The central bank will be holding its monetary policy board meeting next week. It maintained key interest rate at 2% at the previous meeting in April, after a 0.25 percentage point cut in March.

Asked whether the current political situation under the military junta is having any influence on foreign investment, Prasarn stressed that "there is no problem," saying foreign investors have been net buyers on the local bourse in recent weeks, and there has been no significant selling in the bond market.

He pointed out that in terms of monetary policy, the U.S. Federal Reserve's potential reduction of the money it pumps into the economy is a much bigger factor to consider. "In our country, I think we can handle the current economic situation," the governor said.

Prasarn also stated that "the currency rate is stable." The baht now trades at around 32.46 against the greenback, slightly higher than pre-coup levels.

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